Stocks were quiet yesterday, but the bond market fell under a surprise attack. The 30-year bond fell almost two full points, And the sell-off was not limited to the 30-year; it spread across the yield curve. The culprit? The German bond, which was once the bond market’s best friend.

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Over the past few days, the German 10-year yield has doubled from 0.055% to 0.105%. Yesterday’s pop to 0.16% set off alarm bells in trading rooms, and interest rates tripled in Germany.

Yes, the yield only went from microscopic to barely-visible-with-the-naked-eye, but bond traders are easily spooked. Bond prices are higher this morning as the German 10-year note yield has retreated to 0.136%. After months of slavishly following the German 10-year bond lower in yield, U.S. bond traders finally shook off that obsession when the German yield went into the twilight zone. I hope yesterday wasn’t an omen that U.S. traders will start watching the German yield move on the upside.

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Dwight Johnston is the chief economist of the California and Nevada Credit Union Leagues and president of Dwight Johnston Economics. He is the author of a popular commentary site and is a frequent speaker at credit union board planning sessions and industry conferences.